Oil extended gains on Wednesday, advancing by over 2%, as a hurricane halted offshore operations in the United States oil and gas sector and an industry report pointed to a fall in the country’s crude stockpiles.
Beyond a quarter of U.S. offshore production was closed down on Tuesday because of Hurricane Sally. That same day, the American Petroleum Institute (API) reported that crude storage tumbled by 9.5 million barrels, despite analysts’ expectation to the contrary.
Brent crude added 88 cents or 2.17% to $41.41 a barrel by 11:26 West Africa Time, while U.S. crude rose 90 cents or 2.35% to $39.18. Both contracts rose by more than 2% on Tuesday.
Bonny Light, Nigeria’s top oil grade, rose 58 cents or 1.51% to $39.10 per barrel on Tuesday just as Qua Iboe, another major national crude grade, advanced by 35 cents or 0.87% to $39.76.
“Overnight, the API provided a further injection of bullish impetus. As much as a feel-good factor appears to have returned to the oil market, underlying fundamentals remain far from supportive,” said Stephen Brennock of oil broker PVM.